All Forum Posts by: Jeff Copeland

They frown upon external links here in the forums, but (aside from Bigger Pockets of course) one of the best resources for new landlords is Evict TV (easy to find with a Google search) - literally hundreds of videos about landlord-tenant issues and how to address (or prevent) them. 

It's produced by a law firm in Florida (I have no affiliation with them), so some of the legal details are Florida-specific. But there is enough general info there to make every episode a must watch for new landlords!

There is a corresponding podcast called The Property Manager's Podcast by Harry Heist (same content, different format). 

Welcome! Tons of great info here. Be sure to check out the bookstore and podcasts!

An applicant cannot refuse to accept your result. They either meet your requirements or they don't. 

Of course you have to make sure your requirements are legal and fair, and applied equitably to all applicants. But if applicants don't meet them, you send them an Adverse Action Notice as required by law, and move on. It isn't a negotiation in most cases. 

I will also add than it is frighteningly easy to obtain fake pay stubs, and it can be tempting to let your guard down when you need to fill a vacancy. Employment/income verification is crucial if there is any doubt whatsoever, and I would find it doubly concerning if an applicant resisted or discouraged us doing one. Don't get bullied into skipping it. 

Honestly, I think the biggest mistake new investors make is analysis paralysis. Time is your best friend in best friend in real estate, so there is a very real cost to doing nothing (aka "waiting"). 

And a corollary to that is thinking everything is going to go exactly to plan, and freaking out or giving up when it doesn't. It never will. Your numbers and projections will never be 100% accurate, and there will always be unexpected issues and problems. 

Real estate (in the sense of owning and holding real estate long term for real equity accumulation and generational wealth) is a get rich slow scheme, so you have to be in it for the long haul, be prepared to roll with the punches, pivot, and have multiple exit strategies, and realize that a single eviction or repair is not the end of the world. One the contrary: it's a normal, expected, everyday part of being a landlord. 

Keep your eye on the prize. 

There might be tax advantages to running the revenue and expenses through an LLC (talk to a CPA), but from a liability and asset protection standpoint, if the LLC doesn't own the property, it may not help much. If someone breaks their leg or dies on your property, the landlord (and the landlord's homeowners insurance) gets sued. 

So a more pressing concern might be what does your homeowners insurance policy say about running an Airbnb out of your basement? You may need better or different insurance coverage, to include an umbrella policy. 

From a Fair Housing perspective, it is definitely a best practice to publish your criteria, and even more important that you adhere to them and treat every applicant exactly the same. 

If your requirements aren't published, applicants can claim you are churning application fees or playing favorites based on a protected class (race, color, religion, national origin, sex, age, familial status, etc.) rather than based on published criteria. And it's hard to prove otherwise if your requirements are kept secret.

The one caveat here is be careful how you state your requirements when it comes to criminal records. There have been dozens of lawsuits against landlords and PMs from felons based on HUD's disparate impact guidance (we go so far as to reference and link to the HUD guidance in our published screening criteria), and you cannot make blanket statements such as "No Felonies".

It can be difficult to enforce or collect from co-signers, but it does give you another throat to choke, as well as leverage with the tenant (because they usually don't want you contacting their co-signer for payment). 

You absolutely have to verify credit and income of the co-signer. What would be the point of having a cosigner if the co-signer has a 300 credit score and no income? 

The idea is for the co-signer to be more qualified than the tenant. 

Ask them why, and make sure you get a legit answer.

A couple of reasons I have seen companies do this: 

1.  A company renting out a house for their employees (for example, 4 employees building a bridge or a parking garage, 12 month project in a city away from home, renting a house is cheaper than hotel rooms and per diem). This can be a legit way to get your house rented, possibly at premium rent, to a stable entity for an extended period of time. In this scenario, you might consider hiring a local landlord-tenant attorney to draft and/or review the lease, to make sure you are as protected as possible and have some recourse against the occupants if they cause problems. But people in this scenario are usually there to work, not to party.  

2. People who want to lease from you long term through a Corp or LLC, so they can turn around and do short term rentals (essentially STR subleasing, or arbitrage) with your property. This can be a major red flag, because it probably isn't your intended use, it may not conform to zoning, and it could result in increased wear & tear, complaints from neighbors, and code violations.

One of the reasons there's no flow chart you can just buy or copy is there is a complex web of federal, state, and local laws you have to comply with when it comes to tenant screening (Fair Housing, Privacy Act, Fair Credit Reporting Act, HUD Guidance on Criminal Records, Section 8 Income Qualifications...just off the top of my head). You need to know a lot of stuff about a lot of stuff to effectively and legally screen tenants. 

There are some great automation tools for the logistics of responding to tenants, scheduling showing, etc (Tenant Turner, Show Mojo, and Rently are a few that come to mind). These can save you tons of time and automate a lot of the back and forth and tire kicking. 

But don't overlook the importance of knowing what to do and what to say once you actually get into the screening process.

It depends: Understanding Bankruptcy When Screening Tenants

(no affiliation, just great info that's exactly what you are looking for)